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Tivo Inc. Business Information, Profile, and History

2160 Gold Street
Alviso, California 95002
U.S.A.

Company Perspectives:

Founded in 1997, TiVo, a pioneer in home entertainment, created a bra nd new category of products with the development of the first digital video recorder (DVR). Today, the company continues to revolutionize the way consumers watch and access home entertainment by making TiVo the focal point of the digital living room, a center for sharing and experiencing television, music, photos and other content. TiVo connec ts consumers to the digital entertainment they want, where and when t hey want it. The company is based in Alviso, California.

History of Ti Vo Inc.

TiVo Inc. is a leading provider of digital video recorders (DVRs), se lling its devices through retailers and licensing agreements with DIR ECTV and Comcast Corporation. The company charges a monthly subscript ion fee for its DVR service, which is paid either directly by the sub scriber or through the subscriber's satellite or cable provider. TiVo contracts with third-party manufacturers to produce its devices.

Origins

Few products in the consumer electronics industry generated as much a ttention as a device built by James Barton and Michael Ramsay. In the years before they built their first prototype machine, Barton and Ra msay worked for two Silicon Valley-based companies, Convergent Techno logies and Silicon Graphics. At Silicon Graphics, Ramsay led the comp any's workstation division and Barton worked as one of the engineers designing an interactive television system for Time Warner. The syste m relied on using massive, centralized servers to store digitized pro grams that subscribers could access through their television sets at home, enabling them to watch stored programming whenever they chose. The project, which was rumored to have cost $150 million, was aba ndoned by Barton before Time Warner decided to shut down further deve lopment. "People come up with all sorts of reasons why interactive te levision didn't work," Barton said in a September 21, 1998 interview with Forbes. "The basic reason is centralized planning does no t work. Why did the economy collapse in Russia?," he asked. "Because the Kremlin wasn't able to deliver what people wanted." Barton, along with Ramsay, left Silicon Graphics in 1996, intending to build a dev ice that gave consumers greater control than the Time Warner system o ffered, endeavoring "to deliver what people wanted."

When Barton and Ramsay founded TiVo in August 1997, they set in motio n what promised to be a revolution in consumer electronics, one that would greatly affect the entertainment industry. Few products posed s uch a threat to the status quo in the broadcasting industry and provo ked as much speculation about the future of television as the product they envisioned. The basic idea behind the proposed device was to co mbine a computer-style hard drive and software with a television tune r, thereby enabling a user to record programs, pause live television, and skip past advertisements. Instead of relying on content stored o n a centralized server, the basis of the Time Warner project, the mac hine proposed by Barton and Ramsay put the power of choosing content in the hands of the user. The cost of hard drives had dropped to the point where Barton believed he could build a machine capable of stori ng 20 hours of television programming for approximately $300. Con vinced their idea would work, Barton and Ramsay began soliciting for the capital required to get their business underway, presenting their idea to venture capitalists in Silicon Valley. "We walked in," Ramsa y remembered in a February 17, 2004 interview with the Financial T imes, describing one meeting with a group of potential investors, "and said: 'We are after a consumer market, not enterprise. It is ab out entertainment, not technology, and we are going to need several h undred million dollars before we ever turn a profit.'" Ramsay's last statement proved particularly prescient. TiVo, from its start, create d a high level of excitement, fueling great expectations, but turning such promise into financial success proved to be a challenge for the company for years to come.

Barton and Ramsay obtained $3 million from venture capitalists to get their company up and running. With the initial seed money, the p air and a team of colleagues developed a prototype device and showed it to a group of network executives, demonstrating a product that all owed viewers to watch whatever programming they liked, whenever they liked, without watching the commercials that funded the programming. The response from the group of network executives, who sat and watche d a product that undermined their control, was not surprising. "They asked me if I was the devil," Ramsay said in his February 17, 2004 in terview with the Financial Times.

Ramsay and Barton pressed forward with bringing their idea to market. They began negotiating with consumer electronics companies, searchin g for manufacturers to manufacture the TiVo boxes, and they began dis cussions with content providers, hoping to reach agreements with cabl e channels and network producers. TiVo raised an additional $4.5 million in July 1998, giving the company the capital to fund an expec ted product launch in early 1999. When the first TiVo was introduced in March 1999, its debut was heralded as the most important innovatio n in the home entertainment industry since the introduction of the VH S video recorder. TiVo offered users the ability to locate and record multiple shows and search for programs by actors, genre, and plot li nes, and it featured what was called "suggestive viewing." Software o ffered on-screen suggestions to viewers about possible recording opti ons, basing the recommendations on the viewing habits of the user. If a TiVo customer watched a horror film, for instance, the technology compared certain aspects of the program with other programs, deducing that the viewer might like to record other films of the same genre.

Once their company had a product on the market, Barton and Ramsay fac ed the challenge of turning expectations into reality. The period for talking about the potential of TiVo had ended, leaving the founders with the task of realizing the potential of their vision through exec ution, a task that would prove to be extraordinarily difficult in the years ahead. At the time of the launch of TiVo, analysts projected t here would be ten million TiVo-like DVRs in use by 2005, but Barton a nd Ramsay were not alone in attempting to dominate the market. Palo A lto, California-based Replay Networks also was marketing a product wi th hard drive recording capabilities, marketing itself, like TiVo, as a purveyor of what both companies called "personal television." In S eptember 1999, TiVo completed its initial public offering of stock, t urning to Wall Street to fill its coffers for the battle ahead, but a s it turned out the company's greatest challenge was not the threat p osed by direct competitors such as Replay Networks' ReplayTV service. Instead, the greatest difficulty was in convincing the public that T iVo was the revolutionary innovation nearly every industry observer c laimed it was. "We are about integrating with the traditional televis ion infrastructure and making it better by personalizing the televisi on experience for the consumer," a TiVo executive explained in an Apr il 5, 1999 interview with Electronic Media. "We make it possib le for them to view shows more akin to their taste and are working wi th the networks to provide a new frontier, a new portal into the view ing experience." The executive's statement rang true to most ears, pa rticularly early TiVo customers who expressed a deep appreciation of the device in market research studies, but the problem for Ramsay and Barton was getting customers to bring a TiVo into their homes.

TiVo and DIRECTV Joining Forces in 1999

TiVo's efforts to create and to penetrate the market for DVRs were he lped substantially by an agreement made during the first year its dev ice was put on the market. Initially, the company's machine retailed for between $499 and $1,499, a price range encompassing model s with between 10 and 30 hours of capacity. In addition, TiVo custome rs were required to pay a $10 per month subscription fee to cover the costs of receiving programming information through TiVo software . Undoubtedly, some consumers were wary of the costs involved in tryi ng out a new type of electronics device, despite its characterization as a revolutionary product, something that would change the way ever yone watched television in the future. Barton and Ramsay's hopes of g aining widespread acceptance early on failed, but their company drew much of its financial sustenance from an agreement with DIRECTV, the largest provider of satellite television in the United States. In 199 9, DIRECTV agreed to assist TiVo in marketing and delivering TiVo ser vice to the satellite provider's customer base, the beginning of a lo ngstanding agreement between the two companies that provided the prim ary source of new customers for Barton and Ramsay.

Ramsay's prediction that it would take years and several hundred mill ion dollars of investment before TiVo turned a profit was accurate. T he company signed its one-millionth subscriber in November 2003, but had yet to record a profit, racking up more than $550 million of debt in its attempt to bring TiVo to the masses. Although competition from other DVR manufacturers played a part in TiVo's inability to po st a profit, the company's lackluster financial performance stemmed i n large part from the public's tepid response to DVR technology. By 2 004, three million DVRs had been sold, far fewer than the ten million forecast by analysts five years earlier. Of the three million DVRs i n use, only one-third bore the TiVo logo. The widely predicted revolu tion that TiVo was expected to lead had failed to materialize, leavin g the company almost entirely dependent on its licensing agreement wi th DIRECTV for a volume of business that did not generate a profit.

New Leadership for the Future

TiVo's fortunes began to improve in 2005, an eventful year for the co mpany that hinted at the beginning of widespread acceptance of DVR te chnology. The year began with Ramsay's announcement that he would vac ate his post as chief executive officer. Several months later, TiVo a nnounced that it had reached an agreement with Comcast Corporation, t he largest provider of cable television in the United States. Comcast had begun to offer DVR set-top boxes to its subscribers, but the com pany signed its joint venture agreement with TiVo because of the stre ngth of the TiVo name. "They are like Kleenex," an analyst said in a March 16, 2005 interview with the Chicago Tribune. "Their bran d name defines the entire product category. They have a lot of patent s and intellectual property, but their real value is their brand." Th e importance of the agreement with Comcast increased exponentially wh en TiVo executives learned that their agreement with DIRECTV, the lif eblood of the company, would no longer provide a significant stream o f revenue. Roughly a year earlier, Rupert Murdoch's News Corporation had acquired a 34 percent stake in DIRECTV, a deal that threatened to end DIRECTV's relationship with TiVo because News Corp. owned a U.K. -based company named NDS with its own DVR technology. As expected, DI RECTV began to distance itself from TiVo's devices in August 2005, wh en it started emphasizing the distribution of DVRs made by NDS to new subscribers.

Against the backdrop of the pivotal deal signed with Comcast and the fading importance of the agreement with DIRECTV, TiVo gained new lead ership. In July 2005, Tom Rogers was appointed president and chief ex ecutive officer. Rogers began his career as an attorney working for a Wall Street firm, a position that eventually led to his appointment as senior counsel to the U.S. House of Representatives subcommittee o n Telecommunications, Consumer Protection and Finance. Next, Rogers s erved as president of NBC Cable and executive vice-president of NBC, spearheading the creation of CNBC and the formation of the MSNBC part nership with Microsoft. He joined TiVo's board of directors in 1999, brokering NBC's original investment in the company, and reportedly pr esided over the negotiations with Comcast.

Rogers's tenure began on an exceptionally positive note, offering the new leader a moment to savor that Ramsay had never enjoyed during hi s eight years of leadership. In August 2005, TiVo reported the first profit in its history, posting $240,000 in net income during the second quarter of 2005, an enormous increase from the $10.8 milli on the company lost during the same period in 2004. "I got to hand it to the team," Rogers said in an August 24, 2005 interview with the Financial Times. "They've heard a lot of skeptical comments tha t TiVo was never going to see a profit. We've shown the world that we can manage to achieve profitability. Our customer base is generating enough revenue to secure profitability."

Despite Rogers's enthusiasm, there was little expectation that TiVo w ould begin to operate profitably on a consistent basis after its achi evement during the second quarter of 2005. Rogers conceded that the c ompany was expected to lose between $20 million and $25 milli on in 2005, as it continued to emphasize increasing its business volu me over sustaining profitability, something Rogers believed was in th e best long-term interest for TiVo. "I am firmly convinced that TiVo can extend its strong brand identity and technology platform to the m ass market through broader distribution by various carriers, and thro ugh growing its value as an advertising medium," he said in a July 9, 2005 interview with the Online Reporter. "After pioneering th e digital video category, TiVo is now uniquely positioned to help mul ti-channel carriers, networks, and advertisers grow their businesses in an environment that presents new realities for how television is w atched."

Principal Competitors: Microsoft Corporation; ReplayTV; THOMSO N; Comcast Corporation; EchoStar Communications Corporation.

Related information about TiVo

location = Alviso, California, USA
| products = TiVo digital video recorders
| revenue = profit$225.36 Million USD (2006)
| net_income = loss-$49.8 Million USD (2006)
| homepage = www.tivo.com
}}

TiVo (pronounced tee-voh, IPA: ) is a popular brand of digital video recorder (DVR) in the United States. It is a consumer video device which allows users to capture television programming to internal hard disk storage for later viewing (sometimes called "time shifting").

Operation

TiVo systems function similarly to VCRs, but use non-removable hard disk storage, and contain much more sophisticated software to record programs?not only those the user specifically requests, but also other material the user is likely to be interested in. Unlike traditional tape-based recorders, a TiVo DVR can record a new program while playing any previously-recorded program, including the start of the recording in progress.

DVR function

A TiVo DVR allows a user to specify which programs to record by time, by program title, and by specifying combinations of genre, actors, directors, etc. Based on a database of programs available to the user?dependent upon his or her location and/or cable/satellite services he or she uses, and updated roughly once a day via phone or network connection to TiVo headquarters?it selects and records the desired programs. The program information is supplied by Tribune Media Services and the TiVo has data for approximately two weeks into the future.

Currently, only the most expensive Tivo 3 series units will record high definition TV. Since live TV is played through Tivo (enabling the stop action available while watching live TV), connecting anything less than a series 3 to a high definition TV will result in the loss of the ability to see high definition TV.

TiVo has a "Season Pass" feature that instructs the TiVo to record a show through the entire season (and beyond) on a particular channel, with the option of recording First Run Only, First Run & Repeats, or All Episodes. TiVo also follows a "28 day rule" wherein it keeps track of each program it records and it will not record the same program again within 28 days. The "All Episodes" setting overrides this rule.

TiVo also has a WishList feature. WishLists can also be set to automatically record, referred to by TiVo users as an Auto-Record WishList (ARWL). If two SPs and/or ARWLs have programs which would both be recorded, which overlap, the higher priority recording will be recorded and the lower priority recording will either not record or be "clipped" at the beginning or end of the program. If the TiVo can record a later airing of the lower priority program, it will do so. (For systems with two tuners, conflict resolution only comes into play if three or more programs overlap, with the two highest priority programs being recorded.)
In addition to recording programs specified by the users, a feature pioneered by TiVo is the recording of additional programs based on the viewing habits of the household, called TiVo Suggestions. TiVo users can also rate programs favorably or unfavorably, ranging from three "thumbs up" to three "thumbs down." Subscriber A might then receive a recommendation for Futurama because, other than that show, Subscribers A and B have identical preferences.

When not recording a program, the TiVo unit automatically records the currently-tuned channel into a "live buffer", which is a temporary recording of (up to) 30 minutes of recently-viewed programming. (Changing the channel resets the live buffer, and dual-tuner models have a separate buffer associated with each tuner.) This buffer allows users to pause or rewind "live TV" within a 30-minute window, which is a huge advantage when an unwanted interruption (such as a ringing phone or crying baby) occurs at an inopportune time in the program.

If the user chooses to record the current program, any available portion of that program in the live buffer will be included in the recording. (Sometimes the length of the program converted from the live buffer may actually exceed the nominal 30-minute limit slightly, depending on that actual amount of disk space used by VBR recording in the buffer.)

Another advantage over traditional tape-based VCRs is the ability to play previously-recorded programs while recording a new program. While this ability can be crudely approximated by using multiple VCRs (for programs on different tapes), a TiVo DVR can also play a partial program while it is still being recorded, a feat which is impossible to accomplish with traditional VCRs. In fact, some users deliberately wait 10-15 minutes to start watching a program (either recorded or in the live buffer), allowing them to fast-forward through commercials and catch up to "live TV" by the end of the program.

In addition, unlike generic DVRs, TiVo Series2 units can be easily connected to a home network www.tivo.com/getready, allowing TiVo users to schedule recordings on TiVo's website (via TiVo Central Online), transfer recordings between TiVo units (Multi-Room Viewing (MRV)) or to/from a home computer (TiVoToGo), play music and view photos over the network, and access third-party applications written for TiVo's Home Media Engine (HME) API.

TiVo is also moving into the broadband content delivery market. There have been a handful of trials in the past, and TiVo has been offering the Rocketboom video blog for many months. More recently TiVo began technology reviews from CNet, and on June 7 2006, TiVo announced TiVoCast www.tivo.com/cms_static/press_95.html. TiVo has also announced an agreement with BrightCove www.tivo.com/cms_static/press_90.html to provide additional broadband content.

Hardware anatomy

The TiVo unit was designed by TiVo Inc., which currently provides the hardware design and Linux-based TiVo software, and operates a subscription service (without which some models of TiVo will not operate). TiVo units have been manufactured by various OEMs, including Philips, Sony, Hughes, Pioneer, Toshiba, and Humax, which license the software from TiVo Inc. To date, there have been three "series" of TiVo units produced.

TiVo systems are based on PowerPC (Series1) or MIPS (Series2) processors connected to MPEG-2 encoder/decoder chips and high-capacity IDE/ATA hard drives. Although not supported by TiVo or equipment manufacturers, larger drives can be added.

Some recent models manufactured by Toshiba, Pioneer, and Humax, under license from TiVo, contain DVD-R/RW drives. The models can transfer recordings from the built-in hard drive to DVD Video compliant disc, playable in most modern DVD systems.

All standalone TiVo systems have coax/RF-in and an internal cable-ready tuner, as well as analog video input?composite/RCA and S-Video?for use with an external cable box or satellite receiver. Audio is RCA stereo, and the DVD systems also have digital optical out.

Until 2006, standalone TiVo systems could only record one channel at a time, though a dual-tuner Series2DT (S2DT) box was introduced in April 2006. This is due to an FCC mandate that all devices sold after March 2007 with an NTSC tuner must also contain an ATSC tuner. With the S2DT they opted to remove NTSC, the forthcoming Series3 will support both NTSC and ATSC.

The Series2 systems also have USB ports, currently used only to support network (wired Ethernet and WiFi) adapters. The 6xx is the best performing Series2 to date, outperforming even the old leader, the 2xx, and far better than the lowest performing 5xx.

Some TiVo systems are integrated with DirecTV receivers. Only the standalone systems can be networked without additional unsupported hacking.

The latest DirecTiVo units (HR10-250) can also record HDTV to a 250GB hard drive, both from the DirecTV stream and over-the-air via a standard UHF- or VHF-capable antenna.

In 2005 DirecTV dropped TiVo and developed its own DVR.

On July 8, 2006, DirecTV announced an upgrade to version 6.3 on all remaining HR10-250 DirecTiVo receivers, the first major upgrade since this unit was released. directv.com/DTVAPP/global/contentPage.jsp?assetId=P3200006 This upgrade includes features such as program grouping (folders), a much faster on-screen guide, and new sorting features.

Subscription service

The information that a TiVo device downloads regarding TV schedules as well as software updates and any other relevant information is available through a monthly subscription. The lifetime subscription is attached to the TiVo device and cannot be transferred to another TiVo box. Early on there was also a $99/year option, but this has since been discontinued.

In March of 2006 TiVo discontinued offering lifetime subscriptions. Three upgrade options are available for an additional fee: $30 for the 80-hour S2DT (dual-tuner), $130 for the 180-hour S2DT, and $180 for the Humax DRT400 40-hour S2 with integrated DVD-RW.

Alternatively, if customers buy the hardware at retailers the subscription service is $12.95/month for a 1-year commitment ($155.40 total), or pre-paid service-only plans are available for $155.40 for a 1-year commitment ($12.95/month), $299 for a 2-year commitment ($12.45/month), and $399 for a 3-year commitment ($11.08/month).

Once a bundled unit's commitment expires, it will continue to be billed at the respective monthly rate, unless the user contacts TiVo to change his subscription. January 2005 saw the release of TiVoToGo www.tivo.com/togo, a feature allowing the transfer of recorded shows from TiVo boxes to Windows PCs. TiVo partnered with Sonic in the release of MyDVD 6.1, a software program which allows for the editing and conversion of TiVoToGo files.

In August 2005, Tivo rolled out software www.tivo.com/desktop that allowed users to transfer MPEG2 video files from their PC to their TiVo for playback by the DVR.

TiVo hacking

Many people and groups have organized to "hack" the TiVo box, some to improve the service and others to provide service in countries where the TiVo is not currently being sold. TiVo has generally remained on good terms with these projects, although it has lately tried to clamp down on many of the "back doors" in the software, citing threats to their corporate interests.

Many users have installed additional and/or larger hard drives in their TiVo boxes to increase their recording capacity. Others have designed and built Ethernet cards, a web interface, and figured out how to extract/insert or transfer video among their TiVo boxes.

TiVo enthusiast groups located in countries where the TiVo is not sold have been able to reverse engineer the television subscription service schedule files needed by the TiVo and the protocol used during the transmission of those files to the TiVo. This allows the TiVo to be supplied with television scheduling data not available by subscription from the U.S. In some countries, these groups operate a simulated TiVo central server to make and distribute the necessary files for programs broadcast within their country. Because the ability to supply television scheduling data to the TiVo without paying a subscription fee threatens TiVo's subscription-based business model in the U.S., these groups usually have strict controls over who can access the necessary software or join their group.

Improved encryption found in more recent versions of the TiVo hardware and software has made it more difficult to create the necessary files or to simulate interaction with the TiVo server.

Green Screen of Death

The Green Screen of Death (GSoD), is an error message produced by TiVo machines. The message is displayed while the TiVo attempts to repair the data contents of its hard drive.

The GSoD text reads as follows:

A severe error has occurred.

Please leave the Receiver plugged in and connected

to the phone line for the next three hours while the

Receiver attempts to repair itself.

DO NOT UNPLUG OR RESTART THE RECEIVER.

If, after three hours, the Receiver does not restart

itself, call Customer Care.

History

The device was created by TiVo, Inc. , a company started by veterans of Silicon Graphics and Time Warner's Full Service Network digital video system. Digital signals sent from DIRECTV were stored directly onto TiVo's hard disk.

TiVo can also refer to that corporation, as well as to the TiVo service, which is the network that the recorder unit itself communicates with. made its IPO (Initial Public Offering) on September 30 1999.

TiVo is sometimes used as a verb to describe the digital recording of a television program, regardless of whether the equipment is a TiVo-brand DVR (e.g. "Could you TiVo Desperate Housewives for me tonight?"). The TiVo corporation discourages the use of TiVo in this way, for fear that it could cause the name to become a genericized trademark.

Service availability

The TiVo service is only available to the United States, United Kingdom, Canada, and Taiwan at present. TiVo DVRs have also been modified by end users to work in Australia, New Zealand, the Netherlands, and South Africa.

TiVo service was launched in the United Kingdom in the autumn of 2000. However, Thomson, makers of the only TiVo model in the UK, decided to cease production in early 2002, and soon Sky+ began to dominate the PVR market.
The TiVo service continues to be provided to existing customers, and second-hand machines continue to fetch high prices on online auction sites.

Market share

Despite its innovative functionalities and ease of use, popular perception is that TiVo has had difficulty penetrating consumer markets. Many TiVo adopters testify that they love TiVo so much they cannot imagine watching TV without it. TiVo's market share has dropped as cable television operators have offered free or low-cost DVRs which are widely seen as inferior (at least by TiVo users), but which are still a huge improvement over plain old TV and are "good enough." They are often touted as having no up-front equipment costs and a lower subscription fee as well as seamless compatibility with the cable television system.

While its former main competitor, ReplayTV, had adopted a commercial-skip feature, TiVo decided to avoid automatic implementation of that feature, fearing such a move might provoke backlash from the television industry. Both features are disabled following a reboot and the codes must be re-entered to enable their functionality.)

Future

TiVo and cable television giant Comcast reached a nonexclusive distribution deal in March 2005, easing some investor concerns over TiVo's future. The companies announced that they would make TiVo's service available over Comcast's cable network, with the first co-developed products available by the end of 2006, using the TiVo brand. TiVo is porting their software to the Motorola 6412 cable DVR as part of this deal.

In January 2005, TiVo announced a long-term strategy that includes support for HDTV recording, integrated tuning using CableCARD technology, the ability to download and view content from the Internet, and a program allowing third parties to develop applications for the platform.

In January 2006, at the Consumer Electronics Show, the TiVo Series3 blog.tivolovers.com/tag/series3 was introduced. blog.tivolovers.com/252572.html This revision represented an evolutionary step in the TiVo service, adding the capability to record high definition television and digital cable content utilizing CableCARD technology. Each tuner is capable of tuning QAM (digital cable), analog cable, over-the-air (OTA) ATSC (digital), and OTA NTSC (analog). All content is recorded via the internal tuners.

The Series3 model also includes a 10/100 Ethernet connection port and an external SATA port which supports first- and third-party storage upgrades?a first for TiVo. TiVo announced the release of the Series3 on September 12, 2006.

Controversies

Privacy concerns

Some users are concerned about TiVo's ability to collect detailed usage data from units via the telephone line. As units are downloading schedule data, they transmit household viewing habits to TiVo corporation. Some users were uneasy when TiVo released data on how many users rewatched the exposure of Janet Jackson's breast during the 2004 Super Bowlnews.com.com/2100-1041_3-5154219.html. TiVo records usage data for their own research and they also sell it to other corporations such as advertisers www.nytimes.com/2006/07/26/technology/26adco.html?ex=1311566400&en=143cb4893c1c45a9&ei=5090&partner=rssuserland&emc=rss.
Nielsen and TiVo have also collaborated to track viewing habits.

TiVo claims that all usage data is currently aggregated by ZIP code and that they don't track individual viewing habits. In the United States, users can request that TiVo block the collection of Anonymous Viewing Information and Diagnostic Information from their TiVo DVR by calling 1-877-367-8486. A small percentage of early TiVo units were marketed without being clearly labelled that a subscription was required for full functionality, and some non-subscribing customers were unhappy when they were unable to use new and improved features that subscribers received.

Some Tivo hardware can still be used as a normal digital recorder, recording by date, time, and channel, without a subscription. The concept is that, as users fast-forward through certain commercials of TiVo advertisers, they will also see a static image ad more suitable and effective than the broken video stream.

At its announcement, the concept of extra advertisements drew heavy criticism from TiVo's lifetime subscribers, who have historically been among the company's biggest supporters.

Content flagging

In September 2005, a TiVo software upgrade added the ability for broadcasters to "flag" programs to be deleted after a certain date. news.com.com/TiVo+copy+protection+bug+irks+users/2100-1041_3-5863529.html In 2004, TiVo entered into an agreement with Macrovision to make TiVo machines copyright-protection flag aware, ostensibly to protect future pay-per-view and video-on-demand content.

Service contracts

Also in September 2005, TiVo changed their customer agreement, instituting a one-year service contract for all new activations after September 6, 2005. Customers wishing to cancel the service early are subject to an early cancellation fee of up to $200.www.tivo.com/5.11.6.asp TiVo has not commented officially on this change, but with their recent drive to attract new customers, as well as subsidizing new hardware through large mail-in rebates, the company could be looking for ways to discourage users from cancelling. www.betanews.com/article/TiVo_Institutes_1_Year_Service_Contracts/1127501776

Rebates

TiVo has been a heavy user of mail-in rebates. www.businessweek.com/bwdaily/dnflash/nov2005/nf20051123_4158_db016.htm?campaign_id=topStories_ssi_5

References

Chronology

Key Dates:
1997: TiVo is founded by James Barton and Michael Ramsay.
1999: The first TiVo is introduced.
2003: TiVo's subscriber base reaches one million customers.
2005: TiVo signs a licensing agreement with Comcast Corp.

Additional topics

Company HistoryBroadcasting

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